CEFC announces $160m HEUF finance to deliver low-rate green home loan with Westpac

18 August 2024

A CEFC investment of $160 million will support a new Westpac home loan, offering eligible customers a competitive variable rate of 4.49 per cent per annum* on loans to install energy efficient clean technologies. The CEFC investment, made through the Household Energy Upgrades Fund (HEUF) will allow Westpac to be ready to fund at least $320 million worth of loans.

From Monday 26 August Westpac owner-occupier and investor home loan customers with an existing or approved eligible loan will be able to apply to borrow up to $50,000 with a loan term of up to ten years, to install new features or technology in their property to improve its sustainability.

The Westpac Sustainable Upgrades Home Loan will be available to eligible Westpac home loan customers wanting to install new features or technology to improve sustainability, including energy-efficient appliances, solar batteries, EV chargers, double-glazed windows, and insulation.

The CEFC is working with a wide range of potential counterparties to deliver for consumers through the HEUF. There are many benefits to working with a lender with the size and scale that Westpac offers. We expect to leverage Westpac’s significant share of the home lending market and strong mortgage customer base to further develop the home energy upgrades ecosystem and deliver real impact.

Richard Lovell

Executive Director, CEFC

CEFC CEO Ian Learmonth said: “Our second investment through the HEUF demonstrates strong interest from the banking sector to help customers save on energy costs. Through this HEUF investment, the first with a bank, we will be helping deliver competitive-rate finance. CEFC wholesale finance, combined with a significant contribution by Westpac, has delivered a low rate that will improve accessibility to Australians and drive further take up of green home loan products.

“Increasing the uptake of renewable energy, storage and related infrastructure is critical to Australia’s net zero ambitions and clean energy transition. The installation of more rooftop solar, home batteries and energy efficiency equipment will help manage household energy costs and unlock additional clean energy capacity. This means we can better manage energy demand and ultimately contribute to the creation of a stronger, more reliable and cleaner grid.”

Westpac Chief Executive Consumer Jason Yetton said: “We are proud to support the CEFC’s focus on supporting Australia’s clean energy transition through the launch of our new home loan that will help our customers upgrade their homes and be more energy efficient.

“We know this is something Australians want from their bank. Our research shows that of the two thirds of Australians looking to renovate their home within the next five years, nine in ten¹ would consider making a sustainable upgrade to their home.”

CEFC Executive Director Richard Lovell said: “The CEFC is working with a wide range of potential counterparties to deliver for consumers through the HEUF. There are many benefits to working with a lender with the size and scale that Westpac offers. We expect to leverage Westpac’s significant share of the home lending market and strong mortgage customer base to further develop the home energy upgrades ecosystem and deliver real impact.”

The Australian Government has allocated $1 billion to the CEFC to create the HEUF and fast-track sustainability improvements in existing housing by providing discounted consumer finance through a broad range of co-financiers.

The CEFC has engaged extensively with the sector and received proposals from a wide range of financiers, including major banks, mutual banks, non-banks and fintech innovators. The proposals covered green mortgages, green personal loans and other innovative green finance products to improve home energy performance for homeowners, renters and strata properties.

The CEFC has received proposals for investment opportunities worth more than $850 million in green loans and announced its first HEUF deal in May, a $60 million investment with fintech lender Plenti. It continues to work with a range of lenders to develop products with the potential to be financed through the HEUF, with further commitments expected in 2024.

The HEUF builds on the CEFC experience in designing and leading the green home and personal loan markets, and the uptake of clean energy technologies, through its consumer finance programs, as well as investments to help improve energy efficiency across the property sector.

Australia’s existing 11 million homes are responsible for more than 10 per cent of total emissions and more than 25 per cent of electricity consumption.² Major household emissions are created by inefficient energy systems such as heating, cooling and hot water.

Please note: The CEFC does not provide finance to individual borrowers and is not involved in individual financing decisions. The CEFC does not assess individual finance applications and does not provide grants. Interested borrowers should contact Westpac directly.

* Variable interest rates are subject to change  

¹ 89% of Australians who are looking to renovate their home within five years would consider making a sustainable/environmentally friendly upgrade to their home – Westpac research, August 2024. Research surveyed 1,007 Australians. Surveys distributed throughout Australia including both capital city and non-capital city areas. ² Climateworks Centre, Defining Zero Carbon Homes For A Climate Resilient Future, April 2023